Correlation Between Taeyang Metal and Seah Steel
Can any of the company-specific risk be diversified away by investing in both Taeyang Metal and Seah Steel at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Taeyang Metal and Seah Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taeyang Metal Industrial and Seah Steel Corp, you can compare the effects of market volatilities on Taeyang Metal and Seah Steel and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Taeyang Metal with a short position of Seah Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taeyang Metal and Seah Steel.
Diversification Opportunities for Taeyang Metal and Seah Steel
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Taeyang and Seah is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Taeyang Metal Industrial and Seah Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seah Steel Corp and Taeyang Metal is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Taeyang Metal Industrial are associated (or correlated) with Seah Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seah Steel Corp has no effect on the direction of Taeyang Metal i.e., Taeyang Metal and Seah Steel go up and down completely randomly.
Pair Corralation between Taeyang Metal and Seah Steel
Assuming the 90 days trading horizon Taeyang Metal Industrial is expected to under-perform the Seah Steel. In addition to that, Taeyang Metal is 1.13 times more volatile than Seah Steel Corp. It trades about -0.31 of its total potential returns per unit of risk. Seah Steel Corp is currently generating about -0.05 per unit of volatility. If you would invest 17,820,000 in Seah Steel Corp on September 3, 2024 and sell it today you would lose (670,000) from holding Seah Steel Corp or give up 3.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taeyang Metal Industrial vs. Seah Steel Corp
Performance |
| Timeline |
| Taeyang Metal Industrial |
| Seah Steel Corp |
Taeyang Metal and Seah Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taeyang Metal and Seah Steel
The main advantage of trading using opposite Taeyang Metal and Seah Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taeyang Metal position performs unexpectedly, Seah Steel can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Seah Steel will offset losses from the drop in Seah Steel's long position.| Taeyang Metal vs. AptaBio Therapeutics | Taeyang Metal vs. Daewoo SBI SPAC | Taeyang Metal vs. Dream Security co | Taeyang Metal vs. Microfriend |
| Seah Steel vs. Hanshin Construction Co | Seah Steel vs. Camus Engineering Construction | Seah Steel vs. GS Engineering Construction | Seah Steel vs. HJ ShipBuilding Construction |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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